PROSPECT RESOURCES LIMITED — Governance Information 2020

Sep 29, 2020

Rules 4.7.3 and 4.10.3[1]

Appendix 4G

Key to Disclosures Corporate Governance Council Principles and Recommendations

Name of entity:
Prospect Resources Limited
ABN / ARBN: 30 124354 329	Financial year ended:
30 124354 329	30 June 2020

Our corporate governance statement[2] for the above period above can be found at:[3]

☐ These pages of our annual report: ☒ This URL on our website: https://www.prospectresources.com.au/corporate-governance

The Corporate Governance Statement is accurate and up to date as at 30 June 2020 and has been approved by the board.

The annexure includes a key to where our corporate governance disclosures can be located.

Date: 30 September 2020

Name of Director or Secretary authorising Andrew Whitten lodgement:

1 Under Listing Rule 4.7.3, an entity must lodge with ASX a completed Appendix 4G at the same time as it lodges its annual report with ASX. Listing Rule 4.10.3 requires an entity that is included in the official list as an ASX Listing to include in its annual report either a corporate governance statement that meets the requirements of that rule or the URL of the page on its website where such a statement is located. The corporate governance statement must disclose the extent to which the entity has followed the recommendations set by the ASX Corporate Governance Council during the reporting period. If the entity has not followed a recommendation for any part of the reporting period, its corporate governance statement must separately identify that recommendation and the period during which it was not followed and state its reasons for not following the recommendation and what (if any) alternative governance practices it adopted in lieu of the recommendation during that period. Under Listing Rule 4.7.4, if an entity chooses to include its corporate governance statement on its website rather than in its annual report, it must lodge a copy of the corporate governance statement with ASX at the same time as it lodges its annual report with ASX. The corporate governance statement must be current as at the effective date specified in that statement for the purposes of rule 4.10.3.

2 “Corporate governance statement” is defined in Listing Rule 19.12 to mean the statement referred to in Listing Rule 4.10.3 which discloses the extent to which an entity has followed the recommendations set by the ASX Corporate Governance Council during a particular reporting period.

3 Mark whichever option is correct and then complete the page number(s) of the annual report, or the URL of the web page, where the entity’s corporate governance statement can be found. You can, if you wish, delete the option which is not applicable.

Throughout this form, where you are given two or more options to select, you can, if you wish, delete any option which is not applicable and just retain the option that is applicable. If you select an option that includes “OR” at the end of the selection and you delete the other options, you can also, if you wish, delete the “OR” at the end of the selection.

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ANNEXURE – KEY TO CORPORATE GOVERNANCE DISCLOSURES

Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	We have NOT followed the recommendation in full for the whole of the period above. We have disclosed …4
PRINCIPLE 1 – LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
1.1	A listed entity should disclose: (a) the respective roles and responsibilities of its board and management; and (b) those matters expressly reserved to the board and those delegated to management.	… the fact that we follow this recommendation: ☒in our Corporate Governance Statement … and information about the respective roles and responsibilities of our board and management (including those matters expressly reserved to the board and those delegated to management): ☒ at our Corporate Governance Statement
1.2	A listed entity should: (a) undertake appropriate checks before appointing a person, or putting forward to security holders a candidate for election, as a director; and (b) provide security holders with all material information in its possession relevant to a decision on whether or not to elect or re-elect a director.	… the fact that we follow this recommendation: ☒in our Corporate Governance Statement
1.3	A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment.	… the fact that we follow this recommendation: ☒in our Corporate Governance Statement
1.4	The company secretary of a listed entity should be accountable directly to the board, through the chair, on all matters to do with the proper functioning of the board.	… the fact that we follow this recommendation: ☒in our Corporate Governance Statement

4 If you have followed all of the Council’s recommendations in full for the whole of the period above, you can, if you wish, delete this column from the form and re-format it.

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Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	We have NOT followed the recommendation in full for the whole of the period above. We have disclosed …4
1.5	A listed entity should: (a) have a diversity policy which includes requirements for the board or a relevant committee of the board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the entity’s progress in achieving them; (b) disclose that policy or a summary of it; and (c) disclose as at the end of each reporting period the measurable objectives for achieving gender diversity set by the board or a relevant committee of the board in accordance with the entity’s diversity policy and its progress towards achieving them and either: (1) the respective proportions of men and women on the board, in senior executive positions and across the whole organisation (including how the entity has defined “senior executive” for these purposes); or (2) if the entity is a “relevant employer” under the Workplace Gender Equality Act, the entity’s most recent “Gender Equality Indicators”, as defined in and published under that Act.		☒ an explanation why that is so in our Corporate Governance Statement
1.6	A listed entity should: (a) have and disclose a process for periodically evaluating the performance of the board, its committees and individual directors; and (b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.	… the evaluation process referred to in paragraph (a): ☒in our Corporate Governance Statement … and the information referred to in paragraph (b): ☒in our Corporate Governance Statement
1.7	A listed entity should: (a) have and disclose a process for periodically evaluating the performance of its senior executives; and (b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.	… the evaluation process referred to in paragraph (a): ☒in our Corporate Governance Statement … and the information referred to in paragraph (b): ☒in our Corporate Governance Statement

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Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	We have NOT followed the recommendation in full for the whole of the period above. We have disclosed …4
PRINCIPLE 2 - STRUCTURE THE BOARD TO ADD VALUE
2.1	The board of a listed entity should: (a) have a nomination committee which: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director, and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have a nomination committee, disclose that fact and the processes it employs to address board succession issues and to ensure that the board has the appropriate balance of skills, knowledge, experience, independence and diversity to enable it to discharge its duties and responsibilities effectively.	… the fact that we do not have a nomination committee and the processes we employ to address board succession issues and to ensure that the board has the appropriate balance of skills, knowledge, experience, independence and diversity to enable it to discharge its duties and responsibilities effectively: ☒in our Corporate Governance Statement	☒ an explanation why that is so in our Corporate Governance Statement
2.2	A listed entity should have and disclose a board skills matrix setting out the mix of skills and diversity that the board currently has or is looking to achieve in its membership.		☒ an explanation why that is so in our Corporate Governance Statement
2.3	A listed entity should disclose: (a) the names of the directors considered by the board to be independent directors; (b) if a director has an interest, position, association or relationship of the type described in Box 2.3 but the board is of the opinion that it does not compromise the independence of the director, the nature of the interest, position, association or relationship in question and an explanation of why the board is of that opinion; and (c) the length of service of each director.	… the names of the directors considered by the board to be independent directors: ☒in our Corporate Governance Statement … and, where applicable, the information referred to in paragraph (b): ☒in our Corporate Governance Statement … and the length of service of each director: ☒in our 2020 Annual Report

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Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	We have NOT followed the recommendation in full for the whole of the period above. We have disclosed …4
2.4	A majority of the board of a listed entity should be independent directors.		☒ an explanation why that is so in our Corporate Governance Statement
2.5	The chair of the board of a listed entity should be an independent director and, in particular, should not be the same person as the CEO of the entity.		☒ an explanation why that is so in our Corporate Governance Statement
2.6	A listed entity should have a program for inducting new directors and provide appropriate professional development opportunities for directors to develop and maintain the skills and knowledge needed to perform their role as directors effectively.		☒ an explanation why that is so in our Corporate Governance Statement
PRINCIPLE 3 – ACT ETHICALLY AND RESPONSIBLY
3.1	A listed entity should: (a) have a code of conduct for its directors, senior executives and employees; and (b) disclose that code or a summary of it.		☒an explanation why that is so in our Corporate Governance Statement

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Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	We have NOT followed the recommendation in full for the whole of the period above. We have disclosed …4
PRINCIPLE 4 – SAFEGUARD INTEGRITY IN CORPORATE REPORTING
4.1	The board of a listed entity should: (a) have an audit committee which: (1) has at least three members, all of whom are non- executive directors and a majority of whom are independent directors; and (2) is chaired by an independent director, who is not the chair of the board, and disclose: (3) the charter of the committee; (4) the relevant qualifications and experience of the members of the committee; and (5) in relation to each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have an audit committee, disclose that fact and the processes it employs that independently verify and safeguard the integrity of its corporate reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner.	… the fact that we do not have an audit committee and the processes we employ that independently verify and safeguard the integrity of our corporate reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner: ☒in our Corporate Governance Statement	☒ an explanation why that is so in our Corporate Governance Statement
4.2	The board of a listed entity should, before it approves the entity’s financial statements for a financial period, receive from its CEO and CFO a declaration that, in their opinion, the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.	… the fact that we follow this recommendation: ☒in our Corporate Governance Statement
4.3	A listed entity that has an AGM should ensure that its external auditor attends its AGM and is available to answer questions from security holders relevant to the audit.	… the fact that we follow this recommendation: ☒in our Corporate Governance Statement

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Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	We have NOT followed the recommendation in full for the whole of the period above. We have disclosed …4
PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE
5.1	A listed entity should: (a) have a written policy for complying with its continuous disclosure obligations under the Listing Rules; and (b) disclose that policy or a summary of it.		☒ an explanation why that is so in our Corporate Governance Statement
PRINCIPLE 6 – RESPECT THE RIGHTS OF SECURITY HOLDERS
6.1	A listed entity should provide information about itself and its governance to investors via its website.	… information about us and our governance on our website: ☒at www.prospectresources.com.au
6.2	A listed entity should design and implement an investor relations program to facilitate effective two-way communication with investors.	… the fact that we follow this recommendation: ☒in our Corporate Governance Statement
6.3	A listed entity should disclose the policies and processes it has in place to facilitate and encourage participation at meetings of security holders.		☒ an explanation why that is so in our Corporate Governance Statement
6.4	A listed entity should give security holders the option to receive communications from, and send communications to, the entity and its security registry electronically.	… the fact that we follow this recommendation: ☒in our Corporate Governance Statement

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Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	We have NOT followed the recommendation in full for the whole of the period above. We have disclosed …4
PRINCIPLE 7 – RECOGNISE AND MANAGE RISK
7.1	The board of a listed entity should: (a) have a committee or committees to oversee risk, each of which: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director, and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have a risk committee or committees that satisfy (a) above, disclose that fact and the processes it employs for overseeing the entity’s risk management framework.	… the fact that we do not have a risk committee or committees that satisfy (a) and the processes we employ for overseeing our risk management framework: ☒in our Corporate Governance Statement	☒ an explanation why that is so in our Corporate Governance Statement
7.2	The board or a committee of the board should: (a) review the entity’s risk management framework at least annually to satisfy itself that it continues to be sound; and (b) disclose, in relation to each reporting period, whether such a review has taken place.	… the fact that board or a committee of the board reviews the entity’s risk management framework at least annually to satisfy itself that it continues to be sound: ☒in our Corporate Governance Statement … and that such a review has taken place in the reporting period covered by this Appendix 4G: ☒in our Corporate Governance Statement
7.3	A listed entity should disclose: (a) if it has an internal audit function, how the function is structured and what role it performs; or (b) if it does not have an internal audit function, that fact and the processes it employs for evaluating and continually improving the effectiveness of its risk management and internal control processes.		☒ an explanation why that is so in our Corporate Governance Statement

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Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	We have NOT followed the recommendation in full for the whole of the period above. We have disclosed …4
7.4	A listed entity should disclose whether it has any material exposure to economic, environmental and social sustainability risks and, if it does, how it manages or intends to manage those risks.	… whether we have any material exposure to economic, environmental and social sustainability risks and, if we do, how we manage or intend to manage those risks: ☒in our Corporate Governance Statement

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Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	We have NOT followed the recommendation in full for the whole of the period above. We have disclosed …4
PRINCIPLE 8 – REMUNERATE FAIRLY AND RESPONSIBLY
8.1	The board of a listed entity should: (a) have a remuneration committee which: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director, and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have a remuneration committee, disclose that fact and the processes it employs for setting the level and composition of remuneration for directors and senior executives and ensuring that such remuneration is appropriate and not excessive.	… the fact that we do not have a remuneration committee and the processes we employ for setting the level and composition of remuneration for directors and senior executives and ensuring that such remuneration is appropriate and not excessive: ☒in our Corporate Governance Statement	☒ an explanation why that is so in our Corporate Governance Statement
8.2	A listed entity should separately disclose its policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives.	… separately our remuneration policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives: ☒in our 2020 Annual Report
8.3	A listed entity which has an equity-based remuneration scheme should: (a) have a policy on whether participants are permitted to enter into transactions (whether through the use of derivatives or otherwise) which limit the economic risk of participating in the scheme; and (b) disclose that policy or a summary of it.		☒ an explanation why that is so in our Corporate Governance Statement

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2020 CORPORATE GOVERNANCE STATEMENT

This corporate governance statement sets out Prospect Resources Limited’s ( Company ) current compliance with the third edition ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations ( ASX Principles and Recommendations ). The ASX Principles and Recommendations are not mandatory. However, the Company will be required to provide a statement in its future annual reports disclosing the extent to which the Company has followed the ASX Principles and Recommendations. This corporate governance statement is current as at 30 June 2020 and has been approved by the board of the Company ( Board ).

		Comply
ASX	Principles and Recommendations	(Yes/No)	Explanation
1.	Lay solid foundations for management and oversight
1.1.	A listed entity should disclose:	Yes	The Board is responsible for the corporate governance of
	(a) the respective roles and		the Company. The Board develops strategies for the
	responsibilities of its board and		Company, reviews strategic objectives and monitors
	management; and		performance against those objectives. The goals of the
	(b) those matters expressly reserved		corporate governance processes are to:
	to the board and those delegated to management.		(a) maintain and increase Shareholder value;
			(b) ensure a prudential and ethical basis for the
			Company’s conduct and activities; and
			(c) ensure compliance with the Company’s legal and
			regulatory objectives.
			Consistent with these goals, the Board assumes the
			following responsibilities:
			(a) developing initiatives for profit and asset growth;
			(b) reviewing the corporate, commercial and financial
			performance of the Company on a regular basis;
			(c) acting on behalf of, and being accountable to, the
			Shareholders; and
			(d) identifying business risks and implementing actions
			to manage those risks and corporate systems to
			assure quality.
			The Company is committed to the circulation of relevant
			materials to Directors in a timely manner to facilitate
			Directors’ participation in Board discussions on a fully-
			informed basis.
			It is expected that the division of responsibility of the Board
			and senior executives will vary with the evolution of the
			Company. The Company intends to regularly review the
			balance of responsibilities to ensure that the division of
			functions remains appropriate to the needs

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PROSPECT RESOURCES LIMITED (ASX:PSC) | CORPORATE GOVERNANCE STATEMENT | 2020

		Comply
ASX	Principles and Recommendations	(Yes/No)	Explanation
1.2.	A listed entity should:	Yes	The Company undertakes appropriate checks before
	(a) undertake appropriate checks		appointing a person as a Director of the Company.
	before appointing a person, or putting forward to security holders a candidate for election as a		When the election of Directors are put to security holders at a meeting of members, all material information relevant
	director; and		to the vote are incorporated in the meeting documents,
	(b) provide security holders with all		which includes their relevant professional history and
	material information in its		qualifications.
	possession relevant to a decision
	on whether or not to elect or re-
	elect a director.
1.3.	A listed entity should have a written	Yes	The Company has written agreements in place with each of
	agreement with each director and		its Directors and senior executives.
	senior executive setting out the terms
	of their appointment.
1.4.	The company secretary of a listed	Yes	The Company Secretary is directly accountable to the Board
	entity should be accountable directly to		on all matters to do with the proper functioning of the
	the board, through the chair, on all		Board and operates independently of the executives.
	matters to do with the proper
	functioning of the board.
1.5.	A listed entity should:	No	The Board recognises the importance and value of diversity
	(a) have a diversity policy which		and whilst the Company did not have a diversity policy in
	includes requirements for the		place during the period, a diversity policy has been drafted
	board or a relevant committee of the board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the entity’s		as part of a complete Corporate Governance review with a view to being implemented during the next reporting period. Currently, the Board is racially diverse, spanning three continents. It has one female alternate director.
	progress in achieving them;
	(b) disclose that policy or a summary
	of it; and
	(c) disclose as at the end of each
	reporting period the measurable
	objectives for achieving gender
	diversity set by the board or a
	relevant committee of the board in
	accordance with the entity’s
	diversity policy and its progress
	towards achieving them, and
	either:
	(1) the respective proportions of
	men and women on the board,
	in senior executive positions
	and across the whole
	organisation (including how
	the entity has defined “senior
	executive” for these
	purposes); or
	(2) if the entity is a “relevant
	employer” under the
	Workplace Gender Equality

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PROSPECT RESOURCES LIMITED (ASX:PSC) | CORPORATE GOVERNANCE STATEMENT | 2020

		Comply
ASX	Principles and Recommendations	(Yes/No)	Explanation
	Act, the entity’s most recent
	“Gender Equality Indicators”,
	as defined in and published
	under that Act.
1.6.	A listed entity should:	Yes	Performance evaluation is undertaken by the Chairman
	(a) have and disclose a process for		against agreed key performance indicators and reported to
	periodically evaluating the		the Board. In the case of the Chairman, performance
	performance of the board, its		evaluation is undertaken by the Board against agreed key
	committees and individual		performance indicators, with the Chairman excusing himself
	directors; and		from such discussion and not participating in any vote or
	(b) disclose, in relation to each reporting period, whether a performance evaluation was		resolution on the issue. The Board will implement and disclose a formal policy at such time as is practical.
	undertaken in the reporting period		A performance evaluation was not conducted in the
	in accordance with that process.		reporting period.
1.7.	A listed entity should:	Yes	The Board and senior management team will regularly
	(a) have and disclose a process for		review the performance of its senior executives and
	periodically evaluating the		manage any issues that may emerge. However, the
	performance of its senior executives; and (b) disclose, in relation to each reporting period, whether a		Company has not found it necessary to disclose the process for evaluating performance. The Board will implement and disclose a formal policy at such time as is practical.
	performance evaluation was		A performance evaluation was not conducted in the
	undertaken in the reporting period		reporting period.
	in accordance with that process.
2.	Structure the board to add value
2.1.	The board of a listed entityshould:		No formal nomination committee or procedures have been
	_(a) _have a nomination committee	No	adopted for the identification, appointment and review of
	which:		the Board membership, but an informal assessment
	(1) has at least three members, a		process, facilitated by the Chairman in consultation with the
	majority of whom are		Company’s professional advisers (if required) and
	independent directors;and		significant shareholders.
	(2) is chaired by an independent
	director,
	and disclose:
	(3) the charter of the committee;
	(4) the members of the
	committee; and
	(5) as at the end of each
	reporting period, the number
	of times the committee met
	throughout the period and the
	individual attendances of the
	members at those meetings;
	or
	_(b) _if it does not have a nomination	Yes
	committee, disclose that fact and
	the processes it employs to
	address board succession issues
	and to ensure that the board has
	the appropriate balance of skills,

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PROSPECT RESOURCES LIMITED (ASX:PSC) | CORPORATE GOVERNANCE STATEMENT | 2020

		Comply
ASX	Principles and Recommendations	(Yes/No)	Explanation
	knowledge, experience,
	independence and diversity to
	enable it to discharge its duties
	and responsibilities effectively.
2.2.	A listed entity should have and disclose	No	The Board believes it has the appropriate mix of skills and
	a board skills matrix setting out the		diversity commensurate with its business activities.
	mix of skills and diversity that the
	Board currently has or is looking to
	achieve in its membership.
2.3.	A listed entity should disclose:		The Company recognises that independent directors are
	(a) the names of the directors considered by the board to be independent directors; (b) if a director has an interest,	Yes N/A	important in assuring shareholders that the Board is fulfilling its role and is diligent in holding senior management accountable for its performance. The Board assesses each of the directors against specific criteria to
	position, association or relationship		decide whether they are in a position to exercise
	of the type described in Box 2.3		independent judgment.
	but the board is of the opinion that it does not compromise the independence of the director, the nature of the interest, position,		Directors of Prospect are considered to be independent when they are independent of management and free from any business or other relationship that could materially
	association or relationship in		interfere with, the exercise of unfettered and independent
	question and an explanation of		judgement.
	why the board is of that opinion; and		In making this assessment, the Board considers all relevant
	(c) the length of service of each director.	Yes	facts and circumstances. Relationships that the Board will take into consideration when assessing independence are
			whether a Director:
			• Is a substantial shareholder of the Company or an
			officer of, or otherwise associated directly with, a
			substantial shareholder of the Company;
			• Is employed, or has previously been employed in an
			executive capacity by the Company or another
			Company member, and there has not been a period of
			at least three years between ceasing such employment
			and serving on the Board;
			• Has within the last three years been a principal of a
			material professional advisor or a material consultant to
			the Company or another Company member, or an
			employee materially associated with the service
			provided;
			• Is a material supplier or customer of the Company or
			other Company member, or an officer of or otherwise
			associated directly or indirectly with a material supplier
			or customer; or
			• Has a material contractual relationship with the
			Company or another Company member other than as a
			Director.

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PROSPECT RESOURCES LIMITED (ASX:PSC) | CORPORATE GOVERNANCE STATEMENT | 2020

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ASX Principles and Recommendations Comply (Yes/No)	Explanation
	The Board of Prospect has reviewed the independence of each Director and considers that Mr Fahey and Mr Chen are independent directors. Information with respect to potential issues of independence may be disclosed to the market but no formal policy exists to ensure such disclosure. The length of service of each Director is published in the Company’s Annual Report.
2.4. A majority of the board of a listed entity should be independent directors. No	For the reporting period, a majority of the Board was not independent. However, the Company considers that the Board is appropriately structured given scale of operation, the extensive knowledge of each of the directors regarding the Company and its business and their substantial experience and recognition in the mining industry and other industries relevant to the Company’s operations. For these reasons, the Company takes the view that it is in the best interests of shareholders that the current Directors, with their extensive background and experience, be Directors of the Board.
2.5. The chair of the board of a listed entity should be an independent director and, in particular, should not be the same person as the CEO of the entity. No	The Company’s Chairman is Mr Hugh Warner and its Managing Director (equivalent to CEO) is Mr Sam Hosack. Mr Warner is an executive director of the Company and therefore not an independent director.
2.6. A listed entity should have a program for inducting new directors and provide appropriate professional development opportunities for directors to develop and maintain the skills and knowledge needed to perform their role as directors effectively. No	The Company does not have a formal program for inducting new Directors, however the Company takes care in inducting new Directors to ensure they are able to effectively manage and govern the Company before their nomination as potential Directors.
3. Promote ethical and responsible decision-making
3.1. A listed entity should: No	The Board is committed to the establishment and maintenance of appropriate ethical standards. However, there is currently no official code of conduct in place.
(a) have a code of conduct for its directors, senior executives and employees; and
(b) disclose that code or a summary of it.
4. Safeguard integrity in financial reporting
4.1. The board of a listed entity should:	The Company does not have a separately constituted audit committee. As the Company develops its operations the Board intends to review its practices, and if deemed necessary, establish an audit committee. The Company has an independent external auditor that verifies and safeguards the integrityof the Company’s
(a) have an audit committee which: No
(1) has at least three members, all of whom are non-executive directors and a majority of whom are independent directors; and

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PROSPECT RESOURCES LIMITED (ASX:PSC) | CORPORATE GOVERNANCE STATEMENT | 2020

5

		Comply
ASX	Principles and Recommendations	(Yes/No)	Explanation
	(2) is chaired by an independent		corporate reporting. The Board, from time to time, reviews
	director, who is not the chair		the scope, performance and fees of the external auditor.
	of the board, and disclose:		An external auditor can be removed and/or appointed at a
	(3) the charter of the committee;		meeting of shareholders, provided that the requisite notices
	(4) the relevant qualifications and		under the Corporations Act have been provided to the
	experience of the members of		Company and other relevant parties.
	the committee; and
	(5) in relation to each reporting
	period, the number of times
	the committee met throughout
	the period and the individual
	attendances of the members
	at those meetings; or
	(b) if it does not have an audit	Yes
	committee, disclose that fact and
	the processes it employs that
	independently verify and safeguard
	the integrity of its corporate
	reporting, including the processes
	for the appointment and removal
	of the external auditor and the
	rotation of the audit engagement
	partner.
4.2.	The board of a listed entity should,	Yes	The CEO (or equivalent) and CFO prepared a declaration in
	before it approves the entity’s financial		this form before the finalisation of its financial statements.
	statements for a financial period,
	receive from its CEO and CFO a
	declaration that, in their opinion, the
	financial records of the entity have
	been properly maintained and that the
	financial statements comply with the
	appropriate accounting standards and
	give a true and fair view of the
	financial position and performance of
	the entity and that the opinion has
	been formed on the basis of a sound
	system of risk management and
	internal control which is operating
	effectively.
4.3.	A listed entity that has an AGM should	Yes	An external auditor will be present at the AGM and be
	ensure that its external auditor attends		available to answer questions from security holders
	its AGM and is available to answer		relevant to the audit.
	questions from security holders
	relevant to the audit.
5.	Make timely and balanced disclosure
5.1.	A listed entity should:	No	Whilst there was no written policy in place during the
	(a) have a written policy for complying		reporting period, the Company is committed to providing
	with its continuous disclosure		relevant up-to-date information to its shareholders and the
	obligations under the Listing Rules; and (b) disclose that policy or a summary of it.		broader investment community in accordance with the continuous disclosure requirements under the ASX Listing Rules and the Corporations Act.

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PROSPECT RESOURCES LIMITED (ASX:PSC) | CORPORATE GOVERNANCE STATEMENT | 2020

ASX Principles and Recommendations Comply (Yes/No)	Explanation
	The Board has designated the Company Secretary as the person responsible for overseeing and coordinating disclosure of information to the ASX and shareholders as well as providing guidance to Directors and employees on disclosure requirements and procedures.
6. Respect the rights of shareholders
6.1. A listed entity should provide information about itself and its governance to investors via its website. Yes	The Company’s information is provided on its website www.prospectresources.com.au.
6.2. A listed entity should design and implement an investor relations program to facilitate effective two-way communication with investors. Yes	The Company has an investor relations program and ensures that all material information is conveyed to its investors. Material communications are dispatched to investors either via email, surface mail and/or via market announcement.
6.3. A listed entity should disclose the policies and processes it has in place to facilitate and encourage participation at meetings of security holders. No	Although the Company did not have a formal communications policy in place during the reporting period, all material matters were disclosed to the market in accordance with the ASX Listing Rules. All shareholders are notified in writing of general meetings and are encouraged to attend and participate in the Annual General Meetings of the Company which includes asking questions and voting on the resolutions.
6.4. A listed entity should give security holders the option to receive communications from, and send communications to, the entity and its security registry electronically. Yes	The Company encourages shareholders to register for receipt of announcements and updates electronically.
7. Recognise and manage risk
7.1. The Board of a listed entity should:	The Company does not currently have a separately constituted risk committee. The Board is responsible for the oversight and management of all material business risks. The Board’s collective experience will enable accurate identification of the principal risks that may affect the Company’s business. Key operational risks and their management will be recurring items for deliberation at Board meetings. The Company’s risk profile can be expected to change, and its risk management procedures adapted, as the Company develops significant operations and complexity. The Board intends to continue to regularly review and approve the risk management and oversight policies of the Company.
(a) have a committee or committees to oversee risk, each of which: No
(1) has at least three members, a majority of whom are independent directors; and
(2) is chaired by an independent director,
and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or

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PROSPECT RESOURCES LIMITED (ASX:PSC) | CORPORATE GOVERNANCE STATEMENT | 2020

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ASX Principles and Recommendations Comply (Yes/No)	Explanation
(b) if it does not have a risk committee or committees that satisfy (a) above, disclose that fact and the processes it employs for overseeing the entity’s risk management framework. Yes
7.2. The board or a committee of the board should: Yes	The Board is responsible for overseeing the Company’s risk management systems, practices and procedures to ensure effective risk identification and management and compliance with internal guidelines and external requirements. As of the end of this reporting period, the Board has not completed its review.
(a) review the entity’s risk management framework at least annually to satisfy itself that it continues to be sound; and
(b) disclose in relation to each reporting period, whether such a review has taken place.
7.3. A listed entity should disclose: No	The Company does not have an internal audit function and does not disclose the processes it uses to improve risk management. Nonetheless, it remains committed to effective management and control of these factors.
(a) if it has an internal audit function, how the function is structured and what role it performs; or
(b) if it does not have an internal audit function, that fact and the processes it employs for evaluating and continually improving the effectiveness of its risk management and internal control processes.
7.4. A listed entity should disclose whether it has any material exposure to economic, environmental and social sustainability risks and, if it does, how it manages or intends to manage those risks. Yes	All material risks are announced to the market, in accordance with the requirements of the ASX listing rules and otherwise.
8. Remunerate fairly and responsibly
8.1. The Board of a listed entity should:	The Company does not currently have in place a separately constituted remuneration committee. The remuneration of an executive director will be decided by the Board, with the executive director in absentia. The total maximum aggregate remuneration to be paid to Directors (excluding salaries of executive Directors) is currently set at $500,000. Any increases will be the subject of a shareholder resolution in accordance with the Company’s constitution, the Corporations Act and the ASX Listing Rules, as applicable. The determination of non- executive directors’ remuneration within that maximum amount will be made by the Board, having regard to the inputs and value to the Company of the respective contributions by each non-executive director.
_(a) _have a remuneration committee which: No
(1) has at least three members, a majority of whom are independent directors; and
(2) is chaired by an independent director,
and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or

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PROSPECT RESOURCES LIMITED (ASX:PSC) | CORPORATE GOVERNANCE STATEMENT | 2020

		Comply
ASX	Principles and Recommendations	(Yes/No)	Explanation
	_(b) _if it does not have a	Yes	The Board may award additional remuneration to non-
	remuneration committee,		executive directors called upon to perform extra services or
	disclose that fact and the		make special exertions on behalf of the Company.
	processes it employs for setting
	the level and composition of		Remuneration was reviewed as part of Covid 19 and all
	remuneration for directors and		salaries were reduced.
	senior executives and ensuring
	that such remuneration is
	appropriate and not excessive.
8.2.	A listed entity should separately	Yes	The Company’s policies and practices regarding the
	disclose its policies and practices		remuneration of all Directors and other senior executives is
	regarding the remuneration of non-		set out in the Company’s Annual Report for each financial
	executive directors and the		year.
	remuneration of executive directors
	and other senior executives.
8.3.	A listed entity which has an equity-	No	Although the company did not have a formal policy during
	based remuneration scheme should:		the reporting period, the Company had a Securities Trading
	(a) have a policy on whether		Policy that restricted the trading of the Company’s
	participants are permitted to enter		securities by those who have equity interests in the
	into transactions (whether through		Company.
	the use of derivatives or
	otherwise) which limit the
	economic risk of participating in
	the scheme; and
	(b) disclose that policy or a summary
	of it.

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PROSPECT RESOURCES LIMITED (ASX:PSC) | CORPORATE GOVERNANCE STATEMENT | 2020